(3)Subparagraph (1)(b)(ii) shall cease to apply
as of January 1, 2015 in respect of an amount of electrical energy and capacity
equal to 225,000 kW at 100% load factor at the 230 kV busbar located at the
Churchill Falls (Labrador) Corporation Limited switchyard in Churchill Falls,
but in all other respects that subparagraph shall remain in effect.

ELECTRICAL POWER CONTROL ACT, 1994

SNL1994 cE-5.1
as amended

2.Paragraph 3(a) of the Electrical Power Control Act, 1994 is amended by deleting the word
"and" at the end of subparagraph (iii), by deleting the semi-colon at
the end of subparagraph (iv) and substituting a comma and the word
"and", and by adding immediately after that subparagraph the
following:

(v)should promote the development of industrial
activity in Labrador;

3.Section 5.1 of the Act is repealed and the
following substituted:

Direction to
board

5.1Notwithstanding
sections 3 and 4 of the Act and the provisions of the Public Utilities Act, the Lieutenant-Governor in Council may
direct the public utilities board with respect to the policies and procedures
to be implemented by the board with respect to the determination of rate
structures of public utilities under the
Public Utilities Act and, without limiting the generality of the foregoing,
including direction on the setting and subsidization of rural rates, the
setting of industrial rates in Labrador, the fixing of a debt-equity ratio for
Hydro, and the phase in, over a period of years from the date of coming into
force of this section, of a rate of return determination for Hydro, and the
board shall implement those policies and procedures.

4.The Act is amended by adding immediately after
section 5.7 the following:

Act to apply

5.8(1) Notwithstanding
section 7 of The Churchill Falls (Labrador)
Corporation Limited (Lease) Act, 1961, as of January 1, 2015, the Public Utilities Act shall apply to all transmission
lines and related assets located in Labrador, except

(a)those in relation to the supply of
hydro-electric power described in subparagraph 7(1)(b)(i) of The Churchill Falls (Labrador) Corporation
Limited (Lease) Act, 1961; and

(b)those included in the Muskrat Falls Project.

(2)The Public
Utilities Act shall not apply to the setting of electricity rates for
industrial customers in Labrador other than
the transmission components of those rates, which shall be regulated under subsection
(1).

(3)The public utilities board may receive
applications, hear evidence and make rulings in respect of a matter that will
come into its jurisdiction as a result of subsection (1) or subsections 7(2)
and (3) of The Churchill Falls (Labrador)
Corporation Limited (Lease) Act, 1961 before January 1, 2015, but an order
made by the public utilities board as a result of that application or hearing
shall not have effect until on or after January 1, 2015.

The Churchill Falls (Labrador)
Corporation Limited (Lease) Act, 1961

5.9(1) Where
Churchill Falls (Labrador) Corporation Limited and Newfoundland and Labrador
Hydro cannot reach an agreement for the sale and purchase of the electrical
energy and capacity described in subsection 7(3) of The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961 within
a reasonable time, either party may apply to the public utilities board to establish
the rate to be charged and paid under an agreement.

(2)Where an application is made to the public
utilities board under subsection (1), the public utilities board shall
establish the rate to be charged and paid under an agreement, taking into
account the submissions of the parties and the following:

(d)other prices received by Churchill Falls (Labrador) Corporation Limited for sale of electrical
energy and capacity; and

(e)the policy objective set out in subparagraph
3(a)(v), and the achievement of that policy objective.

(3)The rate established by the board under
subsection (2)

(a)shall be indexed to and adjusted annually for
inflation, and the nature of that adjustment may be established by the public
utilities board as appropriate for the industry;

(b)shall be binding on Churchill Falls (Labrador)
Corporation Limited and Newfoundland and Labrador Hydro, but may be amended or
changed by the parties by agreement without the prior approval of the public
utilities board; and

(c)may be increased by the public utilities board
at any time the rate is less than 50% of the blended Labrador industrial generation
rate, upon application by Churchill Falls (Labrador)
Corporation Limited, at the discretion of the public utilities board.